Uncommon Wisdom

An IBM study of telecommunications predicts that operators will be less focused on simple revenue growth or cost reduction and more on business model transformation in the coming five years. This harmonizes with our own survey, if one considers that “business model transformation” means redirecting business focus on different activities. One import of the shift that IBM focuses on is that this almost certainly involves more IT focus than pure network equipment focus, which we believe strongly to be true. This is likely another datapoint validating Cisco’s software shift, and it shows other vendors the direction to take. It also raises the question of whether IBM might either acquire or partner more strongly with a network vendor for service provider networking.

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